Big business comes out strong for TPP

by Hiroko Nakata

Business leaders urged the government Wednesday to open up the nation’s market by joining the Trans-Pacific Partnership trade pact by June so industries can benefit from the strong consumption power in the United States and emerging economies.

They said Prime Minister Naoto Kan should decide on raising the consumption tax, now at 5 percent, to help solve the fiscal debt crisis and pay for social welfare amid the rapidly aging population.

“This year should be the start of the open market,” Hiromasa Yonekura, chairman of the Japan Business Federation (Nippon Keidanren), told a news conference after a New Year’s party hosted by Keidanren and two other business lobbies.

“If the country can’t join the TPP at this time, Japan would become an orphan in the world,” echoed Tadashi Okamura, chairman of both the Japan and the Tokyo chambers of commerce and industry, at the same news conference.

Their comments followed Kan’s remarks Tuesday as well as a speech Wednesday at the New Year’s reception in which he said he hopes to reach a decision by June on whether to commit Japan to the U.S.-backed TPP and what to do about tax reform, where the main issue would be a consumption tax hike.

Other business leaders at the party criticized a lack of leadership by past administrations and the current ruling bloc.

Asked about what he hopes for the government, Lawson Inc. Chief Executive Officer Takeshi Niinami said, “decisions and actions are important (in politics), but the government hasn’t decided anything.”

Niinami said the country should start discussing the sales tax as early as possible and ease public concerns about the aging society.

Likewise, the government needs to reform the agriculture sector, which has been shrinking as an industry because many farmers can’t find successors, he said.

As for the economic outlook, the leaders said they expect a mild recovery toward the end of the year on the back of strong growth in China and other emerging economies.

“Emerging countries and other Asian nations are growing drastically. This would improve the country’s economy, although the world economy is currently losing steam overall,” Keidanren’s Yonekura said.

“I hope the economy will improve, mainly in emerging nations, as time goes by,” said Toyota Motor Corp. President Akio Toyoda, adding that manufacturers are struggling.